US embassy cable - 04MADRID3059

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SPANISH HOUSING PRICES CONTINUE TO SOAR

Identifier: 04MADRID3059
Wikileaks: View 04MADRID3059 at Wikileaks.org
Origin: Embassy Madrid
Created: 2004-08-10 16:51:00
Classification: UNCLASSIFIED
Tags: ECON EFIN EINV ABLD SP
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.


 
UNCLAS MADRID 003059 
 
SIPDIS 
 
TREASURY PASS TRACI PHILLIPS 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, EINV, ABLD, SP 
SUBJECT: SPANISH HOUSING PRICES CONTINUE TO SOAR 
 
REF: MADRID 604 
 
1. Housing prices continue to rise in the Spanish real estate 
market.  According to Tinsa (Spanish society of home 
appraisers) the price of used housing was 16% higher and new 
dwellings 19% higher midway through the second trimester of 
2004 than the same period of 2003.  These numbers indicate 
that the 2004 housing market is maintaining a similar pace to 
2003, when the average price of housing rose almost 17% 
(reftel). 
 
2. Madrid is Spain's most expensive housing market, with an 
average square meter price of EUR 3,063 (USD 3,767 per square 
meter or USD 350.09 per square foot).  The housing market in 
Barcelona is Spain's second hottest with a price level of EUR 
2,658 (USD 3,269 per square meter or USD 303.81 per square 
foot). 
 
3. The soaring housing market is one of the key engines of 
Spanish economic growth.  According to a speech given by the 
Minister of Public Works, Magdalena Alvarez, at the 48th 
assembly of SEOPAN (an association of Spain's largest 
construction companies), the construction industry provided 
17.7% of Spain's 2003 GDP, an increase of 3.9% over 2002, 
compared to an overall GDP growth of 2.4% for 2003.  New 
construction of homes accounted for 22.8% of total 
construction, while renovation and maintenance of existing 
buildings (including housing) contributed 17.3%. 
MANZANARES 

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